Informatica Shifts Sales DirectionInformatica Shifts Sales Direction

In a strategic shift, Informatica Corp. will no longer directly sell its line of financial, supply-chain, customer-relationship management, and human-resources analytical applications. Instead, the vendor will focus on developing and marketing its PowerCenter data-movement and transformation software, usually used for building data warehouses, for enterprise data integration applications, the company said Thursday.

The market for enterprise information software is growing much faster than the market for analytical applications, says marketing VP Sanjay Poonen. Analyst estimates of enterprise information integration software sales range from $8 billion to $12 billion this year. PowerCenter and related software account for about 90% of Informatica's sales while the analytical apps and related products account for about 10%, Poonen says.

Informatica will leave selling the analytical applications to its software application and system integrator partners, including IBM Business Consulting Services and Cap Gemini Ernst & Young. Resellers are better positioned to adapt the analytical applications for vertical markets and individual businesses, Poonen says. Business partners will resell the data models, metrics, and reports that make up the applications while Informatica will continue to sell the business adaptor components that link the analytical apps to enterprise applications. Informatica will also continue to sell its PowerAnalyzer business-intelligence tool.

As part of its new direction, Informatica has struck a deal with Firstlogic Inc. to resell that vendor's Information Quality Suite software for data assessment, quality, and enhancement tasks as part of the PowerCenter data-integration platform. Later this year, Informatica plans to add metadata management, data profiling, security, and other capabilities to PowerCenter.

"Our corporate focus will now be on our greatest strength, infrastructure software," says president and CEO Gaurav Dhillon.

Also on Thursday, Informatica reported improved earnings on nearly flat sales for its second quarter ended June 30. Revenue for the period was $50.5 million, up less than 3% from $49.1 million in the same period one year ago. Net income was $3.2 million or 4 cents per share, compared with net income of $434,000 or 1 cent per share one year ago.

License revenue during the quarter was down 8% to $24.2 million, but that was more than made up by a 3% increase in service revenue to $26.4 million. The company expects revenue in the range of $48.5 million to $51.0 million for the current quarter with earnings of 1 to 3 cents per share.